Sign InAMZN forecasted to rise based on technical, fundamental analysis and positive market sentiment.
Summary
According to technical and fundamental analysis, market sentiment, and news impact, Amazon's stock is projected to experience an upward movement in the upcoming trading day, potentially getting closer to a DCF valuation of $134.47, making it a 'Buy' for buyers who approach with a long-term perspective.
Technical Analysis
Amazon.com Inc. (AMZN) closed at $129.18 on June 27, 2023, posting a 1.45% rise or $1.85 from the previous session. The intraday trading range for this NASDAQ-listed entity stood between a low and high of $127.55 and $130.085, respectively.
The Relative Strength Index (RSI), a momentum oscillator that measures the speed and change of price movements, stands at 55. Given the RSI value falls between 30 and 70, it indicates that AMZN is neither overbought nor oversold at its current price level.
From a Moving Averages perspective, AMZN is trading above both its 50-day and 200-day moving averages, which are $115.04 and $104.27, respectively. This suggests a bullish trend. The Moving Average Convergence Divergence (MACD), a trend-following momentum indicator, for the 3-month period is 4.31. These technical indicators reinforce the positive upward movement noted.
Fundamental Analysis
AMZN posted an EPS of $0.44, trading at a high Price to Earnings ratio of 293.59, which could been seen as overvalued compared to the market average. Nonetheless, this higher PE ratio could also indicate the market's expectation of high growth rates in the future for Amazon. Its outstanding shares figure stands at approximately 10.26 billion. The market cap of AMZN is $1.32 trillion.
Through discounted cash flow (DCF) accounting, AMZN is valued at approximately $134.47; this figure slightly exceeds the stock's last closing price of $129.18.
The consensus target price from analysts for the stock is $161.55 while the highest and lowest target prices are $270 and $97.78, respectively.
News Impact and Market Sentiment
Multiple recent news pieces contribute to a positive market sentiment on AMZN. The company's innovation in artificial intelligence (AI), as showcased by the launch of AWS Generative AI Innovation Center program and AWS AppFabric, suggests that Amazon is focusing on staying at the forefront of technological development. This inclination for innovativeness has been reiterated by Amazon's Zoox operating driverless robotaxis in Las Vegas.
However, the resuming of student-loan repayments may negatively impact consumer spending, potentially affecting AMZN's sales. Still, the company's breadth in products and services could help stave off significant fallout.
Stock Prediction
Given the technical and fundamental analysis, as well as the current market sentiment, it's projected that AMZN's stock might experience an upward movement in the upcoming trading day, potentially getting closer to the DCF valuation of $134.47.
Evaluation of the Stock
Considering the aggregation of all factors, Amazon.com, Inc. (AMZN) appears to be a 'Buy'. The positive uptrend confirmed by the technical indicators, combined with a robust portfolio of innovative products and services, contributes to this assessment. Despite the high PE ratio and potential negative impact of student loan repayments resuming, the holistic outlook for Amazon remains positive. Buyers should approach with a long-term perspective, factoring in the ongoing sphere of influence and expansion this renowned e-commerce and tech giant holds.
